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The dual role of R&D expenditures in European Union’s member states: short- and long-term prospects

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Torrecillas Bautista, Celia and Fischer, Bruno B. and Sánchez, Andrea (2017) The dual role of R&D expenditures in European Union’s member states: short- and long-term prospects. Innovation, 30 (4). pp. 433-454. ISSN 1469-8412

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Official URL: https://doi.org/10.1080/13511610.2017.1358079



Abstract

The objective of this article is to assess a potential dual role of public expenditures in R&D upon economic growth and employment, using these dimensions as partial representations of the socioeconomic state of affairs in European Union’s Member States. First, we look into direct, short-term impacts arising from R&D expenditures, much in the sense of a multiplier effect. Second, we analyse impacts from the stage of development of National Innovation Systems (NIS) upon the macroeconomic conditions of interest, assuming that current stages of development are products of previous commitment to innovation, that is, a structural, long-term outcome of innovation-oriented investments. In order to empirically test our propositions, we have analysed 28 EU Member States (1990–2013) through three sets of econometric (static and dynamic panel data) models. Results highlight that EU countries’ governmental commitment to their respective innovation systems catalyses current and prospective economic growth and employment levels, suggesting a complementarity between Neo-Schumpeterian and Neo-Keynesian perceptions over governmental R&D involvement. This can bring innovation efforts closer to the macroeconomic debate on monetary and fiscal policies and function as a criticism to austerity measures, as this may not only affect the present socioeconomic situation, but also generate the cornerstone for a perennial state of divergence among EU Member States.


Item Type:Article
Uncontrolled Keywords:Innovation policy; European Union; R&D expenditures; National innovation systems.
Subjects:Social sciences > European Union > Common research policy
Social sciences > Economics > Economic development
Social sciences > Economics > Public economy
JEL:O38, B52, E61
ID Code:57189
Deposited On:02 Oct 2019 09:41
Last Modified:07 Feb 2020 12:40

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